THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

CANDY CROWLEY, HOST: A jobless Labor Day for 14 million Americans looking for work, and a million or so more who have given up the search.

Today, who or what will move the U.S. economy out of its stall? We begin with Tea Party patron, Senator Jim DeMint, and Teamster President Jim Hoffa. Then, as we near the anniversary of 9/11, national security with House intelligence chairman Mike Rogers and Senate Homeland Security Chairman, Joe Lieberman.

And all things political with Peter Baker of the New York Times and Mike Duffy of Time magazine.

I am Candy Crowley, and this is State of the Union.

The nation's capital and the campaign trail will be a wash in jobs plans and presidential politics this week. The president's big unveil is Thursday before a join session of congress, Republicans who want his job have ample opportunity to push and propose their own ideas beginning tomorrow at a Labor Day forum set up by South Carolina Senator Jim DeMint.

He is not always a Republican establishment favorite, but DeMint holds considerable sway in the Tea Party, and the Tea Party may hold considerable sway in the Republican Party primaries.

Let's just say his event will be well attended and closely watched. Republican Senator Jim DeMint joins me now from Clemson, South Carolina.

Senator, thank you so much for taking some time out. I wanted to start off talking about jobs. And what you think has to be in a presidential jobs plan that you will hear about on Thursday night and what cannot be in it.

DEMINT: Well, Candy, I have spent the month of August visiting a lot of businesses, manufacturing plants. I have been on shop floors. I have talked to a lot of the companies that create jobs in South Carolina and across the country. And what they want is less regulation. They just keep talking about the EPA, FCC, all these different agencies, National Labor Relations Board that seem to be harassing companies. They want to know what their health care costs are going to be, what the unemployment costs are going to be. They are actually afraid to hire people because of what they're afraid of what the government will do to them.

I think what I've the president is going to talk about Thursday night is more of the same -- extending unemployment benefits, payroll tax cuts, tax credits for hiring people...

CROWLEY: Can I just interrupt you real quickly and ask you if you are opposed to extending unemployment benefits? Are you opposed to expending the payroll tax cut? Are you opposed to those two things?

DEMINT: I just don't think those things are going to create jobs, Candy. What we're trying -- the president appears to be doing, and frankly I am so tired of his speeches, it's going to be hard for me to watch. We need a plan in writing, he needs to send it to us and tell us what it is going to cost so not only congress and the American people can read it, businesses can read it, but without sending something in writing the president makes all of these grand gestures and then it doesn't appear in any legislation and then he will blame congress for not passing something he never sends over.

So it's pretty clear what we need to do to improve our economy. We need to lower the risk of being in business and we need to make sure there is ample reward for creating those risks.

The president has it backwards. He's creating more risk and he's threatening to raise taxes on small businesses. This is not a good formula. In the short-term things that he does, the temporary things that are designed to create more consumption by giving people a little more to spend is not going to help create jobs. It costs an employer, Candy, about $65,000 to create a $40,000 a year job. If he creates a $5,000 a year tax credit, people are not going to hire for that reason. They may take the $5,000 tax credit if they were going to hire anyway, but this is the kind of thing we're hearing from the president, I hope he will do better than that.

CROWLEY: Let me try to zero in on a couple of things just on that. I don't want to argue economics with you, because there are obviously a lot of people out there with varying ideas, but as far as extending unemployment benefits, in your state alone there was over a 10% unemployment rate right now, people who are hurting. So extending kind of the long-term, that is for 99 weeks of unemployment would no doubt help folks in your state, and there are study after studies showing that people on unemployment do spend that cash, sometimes people who have a job and they get a little cash in their check will save it, but those who are unemployed do spend it. Spending money helps the businesses, and as the businesses earn more money they hire people.

So first of all just on a purely sort of helping people basis, isn't extending unemployment something that you would support?

DEMINT: We have to have unemployment. But the longer you make it the more perverse incentives you create. Candy, I have talked to a lot of businesses in South Carolina who can't get employees to come back to work because they are getting unemployment and they're getting food stamps and they say call me when unemployment runs out. CROWLEY: That can't be the bulk of people who are unemployed -- you don't think the bulk of people, the 14 million Americans who are out of work, actually just prefer to stay on unemployment benefits?

DEMINT: No. There are a lot of people who desperately need it and we need to make sure that we have that safety net in place, but we also have to realize there are a lot of people gaming the system right now. And we need to do better than we have done with just extending benefits, there have to be incentives for people to get back to work. These have to phase out in a way that we haven't done it before.

I am looking forward to hearing what our presidential candidates say on Monday, the Republican candidates, about what to do with jobs, what to do with unemployment, but certainly we have to help those who are in need. But we do have to realize every time we create a government program like this, people game the system just like they do with food stamps and other things. And we need to make sure our incentives move people back into the workforce, rather than keep them at home.

CROWLEY: Let me move you to a discussion on the Tea Party. As you know, we often refer to you as a Tea Party king maker, Tea party favorite, and you are on to the...

DEMINT: Don't.

CROWLEY: Certainly people are coming to your forum, a good many of them accepted your invitation simply because you are seen as somewhat of a power broker. And I want to show you a Quinnipiac poll from mid-August which talks about whether people have a favorable or unfavorable view of the Tea Party. 57 percent of Republicans have a favorable impression of the Tea Party, but when you look at independents, only 26 percent of independents have a favorable view of the Tea Party.

So what would you rather have in a presidential candidate? Do you want somebody who adheres to Tea Party values or do you want the most electable person? Because you can't win elections without independents.

DEMINT: You're exactly right. But there is no the Tea Party. I mean, a lot of Obama and a lot of the Democrats, folks in the media have tried to speak of the Tea Party in derogatory terms and suggest that it's a small right-wing group, but over 70 percent of Americans think we need to balance our budget and stop adding to the debt, that's pretty much what the Tea Party is, it's thousands of small groups around the country who are concerned about the spending, the borrowing and the debt, and for every person who goes to a Tea Party rally, there are hundreds of people who share those concerns.

So what the Democrats are criticizing is legitimate genuine citizen activism, which has brought some accountability to Washington. And that's what I want to be part of.

CROWLEY: But why do you think only 26 percent of independents have a favorable view of it? Do you think it's just PR? DEMINT: Well yeah, they have been blamed for the downgrade and all of these other things and obstruction, which they haven't had anything to do with. These are active citizens. And they -- I have been to Tea Party rallies, Candy, they include a lot of Democrats, libertarians, conservatives, and lot of independents.

So it really is a case where you've the media putting down the Tea Party and then a pollster coming in and saying what do you think of them?

But if you ask what do you think of citizen activism, people who are concerned about reducing spending, borrowing and the debt you're going to find 70 percent of Americans agree with that. So it's not so much the label Tea Party, it's just getting citizens active. And that's what I am trying to listen, that's the voice I am trying to take to Washington.

I am not a head of the Tea Party. There's no head of the Tea Party. The good thing about the Tea Party, is no one a head of it. There are thousands of leaders that who have become active as citizens. And I think as Americans understand more about that, that's something they really appreciate.

CROWLEY: You have kept your powder dry, as they say, when it comes to selecting somebody that you think will be your choice for the presidential nominee from the Republican Party. And so I understand you wanted to hear from them and all of that, what I want to know is when you look at the slate of Republicans who are in there now, is there anyone you could not support should they win the nomination?

DEMINT: Well, Candy I appreciate CNN televising the forum that we are doing on Monday. This is a chance for the candidates to define themselves in their own terms. And we've picked the candidates that are over 5 percent of the poll so we've narrowed the field a little. And they all have strengths. And there is no one in the group that I couldn't support as our nominee, and there's no one who would not do a better job than our current president.

So I'm very open right now. I'm listening to what they say.

DEMINT: I want to find the candidates who understand the principles of American exceptionalism and have the character, the courage, and the confidence to actually lead the greatest nation in the world.

CROWLEY: South Carolina Senator Jim DeMint, thanks for your time.

DEMINT: Thank you, Candy.

CROWLEY: When we come back, what organized labor wants to hear from President Obama about jobs. Teamsters President Jim Hoffa is here next.

(COMMERCIAL BREAK) CROWLEY: Here to talk about what unions want for the economy and from President Obama, Jim Hoffa, president of the International Brotherhood of Teamsters, a union with 1.4 million members, I think I have that right.

So you have met with the president recently. You're going to see him again tomorrow on the sort of traditional Labor Day Detroit event. What you have told him that you want to see in a jobs bill?

HOFFA: We want a bold plan. Labor wants a bold program that's going to rebuild America.

CROWLEY: Does that mean something expensive? Usually when people say, oh, I want a bold plan, it means something that pours a lot of money.

HOFFA: The answer is, it's going to challenge America. I mean, so far what we've done hasn't worked. We're still at 9 percent. So it's not working. We need a bold plan. We have to look what happened with Irene. Look, we have to rebuild our roads, you know, basically our dams, our highways, everything has got to be redone.

You know, our schools, we have got to start that. We need a WPA- type program. But most of all, what I think he has got to do is to challenge business. You know, this is not something that -- you know, labor needs everybody to be in the game.

And what is happening is everybody is saying, what is Obama going to do? And what obligation does American business have? They are sitting on trillions of dollars right now. They're not spending money. We have lost 8 million jobs since '08, and we have got to start challenging them to get into the game.

So another faction of what he should be doing is putting in some type of a tax incentive to get them to spend money to get off the sidelines, get into the game and start spending some of that money here in America and put America back to work.

It can't be done just by the federal government. It has got to be done by all of us. And they have got to put aside labels to say Republican, Democrat. This is an American problem. And all of us can get together to solve this problem.

So we have got to start spending money here and instead of building that next factory in Mexico, build it here.

CROWLEY: Well, I want to talk about trade deals, because the president also wants a couple of free trade deals that I know you are opposed to. But so what you are talking about is perhaps a tax credit for businesses for every person they hire.

HOFFA: Absolutely.

CROWLEY: I don't know if just heard, but Senator Jim DeMint said, you know, if they are going to hire someone anyway, sure, they will take the 5,000, but it's not going to induce businesses to hire, because what they really see and what they really fear is the uncertainty of what health care is going to cost them, what they really fear is regulation that they don't understand, how much bureaucracy they're going to have to build in to their business and how much that will cost.

Would you -- do you accept that as a premise? Or do you think businesses are sitting simply on money, waiting for what?

HOFFA: I think businesses are sitting on money. Look at Apple. They have $76 billion in their checking account. And they're spending it.

CROWLEY: Which they are allowed to have.

HOFFA: But they are not doing anything with it. And instead of investing here, everything they do is in China or is in Asia somewhere. And the answer, look at Honda. Honda is building $1 billion plant, and they want to build it in Mexico. This is on the drawing board right now.

CROWLEY: It's cheaper there.

HOFFA: Why isn't it -- well, we know that. But don't they have an obligation to America to build it in America, to put people to work here instead of in Mexico? That's what I believe.

You know, this is really -- I think the president should challenge the patriotism of these American corporations that are sitting on the sidelines saying, why do we have high unemployment but I am not going to hire anybody? You know, they have an obligation just like the federal government, just like Obama. We have all got to get into the game. And I don't see that happening. So the trillions and billions of dollars that they have on the sidelines, they have money, Pfizer and General Electric, they have trillions of dollars overseas, let's start repatriating that money. Let's start a program to get America going again.

The problem in America is not that we don't have enough money. We have got more money than any other country in the world. The problem is American businesses are not spending it and not getting it in the game. That's how we are going to get America going again.

CROWLEY: I'm hearing tweets across the universe here because -- I want to go back. Are you questioning the patriotism of Apple for sitting on money rather than hiring?

HOFFA: Yes, I am.

CROWLEY: Are you?

HOFFA: Yes, I am. What is it with a company that makes -- and they sell most of their products here in the United States. I mean, they're the biggest -- Apple, you have got Apple Stores everywhere else.

They have been sitting on that kind of money and every time they do something, they do it in China, they do it somewhere else. There's something wrong with that. Don't they have an obligation?

CROWLEY: They would tell you that the high price of labor and the high cost of health care and the high cost of environmental -- you know, drove them out of the country.

HOFFA: I don't believe that at all. You know, we have companies here that make a lot of money like UPS. We have a number of great companies here that are functioning here that are union, Sikorsky, and they are doing very, very well.

You can do it here. But the answer is, you have to have the incentive. And so many companies like Mr. Coffee and all of these other companies that have closed and moved to Mexico, they are wrong. They are unpatriotic.

We have got to turn this around and say, hey, we are an American company, we owe an obligation to America, let's put America back to work.

CROWLEY: As you know, your counterpart at the AFL-CIO has suggested that perhaps the AFL-CIO would not be quite so focused on the re-election of the president but instead start sort of a 24/7 help for its members and getting them politicized, and perhaps local leaders.

Are you happy enough with President Obama, who has done a lot of things, including allowing Mexican trucks in what appears to be a pilot program across the border, which you oppose, he is pushing for at least three free trade agreements, which you oppose, are you happy enough with him to fully invest in his re-election?

HOFFA: We are going to have to. President Obama, we don't agree with all of his policies. There are a number of things that we don't agree with. But overall he has done a good job.

Don't forget, he took over the worst economy in 80 years when he took over in '09. We had the crash of '08. We lost 8 million jobs since then. It's -- you know, he's going to have a very difficult time turning this around.

When the alternatives are Sarah Palin and Michele Bachmann and Rick Perry, it makes it real easy to make this decision.

CROWLEY: So you -- basically it's better than what you see coming down the pike or...

HOFFA: Those people are anti-union, anti-worker. They don't believe in what I believe in. And I don't think that we have a choice here. Because if you hear what they talk about, they talk about basically, you know, no taxes on business, cutting unemployment, getting rid of Social Security, Medicare, Medicaid.

When you cut through all of the rhetoric, that's where you end up. And that's not the American -- what America wants and that's not what the Teamsters want. CROWLEY: Essentially if you ask a tea party member, most of them, what they stand for, they would say smaller government, lower taxes, less federal spending, less regulation. Do you think that there are no members of the Teamsters or of unions in general that believe in that?

CROWLEY: Is that such a horrid...

(CROSSTALK)

HOFFA: I think when you explain it to them -- I'm going to say there aren't some Republicans in the Teamsters, I mean obviously there are, it's a big union, there a lot of people, a lot ideas in the Teamsters union, but when you cut through it all and you start telling them, you know do you want somebody that will cut Social Security -- do you want your Social Security?

If you put it on that basis, they understand I want those things, those are the things I've worked for, those are the things I need and that's what I expect of America. When you do it that way, and cut through this idea, the rhetoric that they have, the Tea Party does, then people realize what is at stake here.

And we see what they have done in Wisconsin and Ohio. Once they get in, what's the first thing they do? They go after collective bargaining for workers. That's the first thing they do. They have tax cuts for the corporations, both in Wisconsin and in Ohio, that's the first thing they do.

So you kind of see where they are going. And when you explain that to people to say that's where they are at and that's where we're at, I think most people will go with Obama.

CROWLEY: Teamsters president Jim Hoffa, thank you so much for coming by.

HOFFA: Great to be here.

CROWLEY: Up next, grading America's safety ten years after 9/11.

(COMMERCIAL BREAK)

CROWLEY: The heads of the 9/11 commission say the country is safer now than ten years ago before the attack, but nine of the recommendations made by the commission in 2004 remain unfulfilled leaving gaping holes in homeland security. The list includes an inability to reliably detect explosives hidden on airline passengers, the failure to implement a nationwide broadband network for emergency communications between firemen, policemen, rescue workers and medical personnel, and the failure to implement federal benchmarks for birth certificates and driver's licenses.

Up next, we will talk to the chairman of the Senate Homeland Security committee and the House intelligence committee.

(COMMERCIAL BREAK) CROWLEY: With the tenth anniversary of 9/11 just one week away, we wanted to get a report card on national security. Joining me here in Washington is Senate homeland security and governmental affairs committee chairman Joe Lieberman, and house intelligence committeeman chairman Mike Rogers.

Gentlemen, thank you both for being here.

It's -- I don't know, it's not an auspicious anniversary is it? It's a bit of a scary one, but what I wanted to ask you first is, we hear no specific credible threats. Do you both feel reasonably sure that we are safe on this -- particularly in New York and Washington -- on this anniversary.

ROGERS: I believe we are safer, but there are still plenty of folks that get up every single morning with the sole intention of planning, conducting, financing and operation against the United States of America. So (inaudible), but I do believe with all the action taken over the last ten years, we're safer, but not out of the...

LIEBERMAN: I agree. I mean, part of this anniversary I think is to look back. And I think if you look back, the American people and the American government have a lot to feel proud about. We really transformed ourselves to meet the new threat of Islamist terrorism.

I don't think anybody on September 12, 2001, would have predicted in the following ten years there would not be another major terrorists attack on the homeland, and there has not been. Also our enemies have secured no major gains in their worldwide effort to attack us and enemies throughout the world including the Muslim world.

They are still out there, we're still in a war, tragically it's going to go on for a while but we are a lot safer and stronger than we were ten years ago.

CROWLEY: Having said that, the two chairman of the 9/11 commission issued their own report card saying, OK, here's said here are our recommendations we put out in 2004, and here is where we are falling short. Remarkably to me, one of them is that there is not a reliable mechanism for detecting bombs aboard airline passengers. We had this entire discussion about how you could see everything in these new machines, and now according to the report, they are not that reliable for detecting bombs.

How is that possible?

ROGERS: Well, I am not exactly sure everything that they looked at. But you have to remember, the enemy gets up every day, takes a look at our security changes, and then adapts. That's what makes al Qaeda so incredibly dangerous.

And they recruit people to their ranks, and they still do that today, even though we've hit them pretty hard, that want to reengineer ways that they can get bombs on aircraft. That's -- it's a dynamic process. I don't think you are going to see one solution at the TSA station that is going to do it. It's going to be a combination of things that get us to a safer place and allow you to get on the airplane with some sense of relief.

CROWLEY: And another thing, senator, that I found jaw-dropping, is that ten years after 9/11, police and firemen, and medical personnel, and emergency rescue workers during an emergency cannot talk to one another because the broadband width hasn't been approved. It's 10 years after. I was told by Governor Cain, former Governor Cain who was one of those commissioners that people died in Katrina because we didn't have that broadband width that they could all talk to each other on. The people, that the policemen saw the Twin Towers wavering, they thought it was unstable, but they couldn't tell the firemen inside to get out, because they're not on the same -- and I just find it -- I think most people would find it inexcusable.

LIEBERMAN: Yeah, I agree. Those are realities that you've just described. But the truth is, interoperability of communications, the ability of first responders to talk to each other in a crisis are much better than they were ten years ago. We have spent hundreds of millions of dollars of federal grants to states and localities making that possible.

What they don't have, and this is what legislation that I and others are co-sponsoring are do, and it ought to pass in this congress, is enough of the spectrum. We want to give them the so- called d-block spectrum, so that they can have the same ability to transmit video, maps, et cetera that most teenagers have on their cell phones. And until we do, we will not have learned a lesson.

But I do want to say, first, hats off to Tom Cain and Lee Hamilton who headed the 9/11 commission. Congress adopted most of what they recommended. Most significant reform of the American intelligence community since the end of the second world war, creation of the Department of Homeland Security.

We're safer because our government is better organized to meet the terrorists threat.

But there is still work to be done. And that's why this report this week is so important.

CROWLEY: Were either of you disturbed when there was an earthquake in Washington, D.C. and cell phone service was unreliable? It seems like every time a major thing happens the first thing to go is your ability to make a phone call.

ROGERS: Well, I mean, that is always a challenge. And remember...

CROWLEY: Should it be?

ROGERS: Well, you have to remember, the burden that we put on those systems today is exponentially larger than it even was ten years ago. So we are struggling to keep up with that. It didn't go out for long, and the emergency communication network, the folks that had the absolute top priority to communicate could communicate, and that's the most important sector where you ought to focus, and then we need to get the civilian side of the communication network up-to-date so when this particular thing happens, if it's a hurricane, a natural disaster or a man-made event that you don't have long-term service that goes out.

CROWLEY: I'm going to put the two of you on pause, because we're going to take a quick break. But up next, we will turn to the situations in Syria and Libya and the stakes for the U.S.

Let me ask one, sort of, final wrap-up 9/11 question, and that is, Al Qaida -- we've spent 10 years diminishing their capabilities. Are they now less of a threat than the lone wolf, as we call them, just somebody who, kind of, shares the ideology but is hard to track because he's just a crazy person on his own?

ROGERS: I think it's a combination of both. They are down. We have hurt them, with the number two just getting taken out just recently. It had a tremendous impact -- Atiyah was his name -- a tremendous impact on their organization because he was such an operational guy.

But they're down but not out. And it's a combination of both. Those lone wolves are part of their strategy to recruit in places like Western Europe and the United States. So you -- even though they are -- they may act independent of a structured operation, they are still part of Al Qaida mission statements and organizational operation, if that makes sense.

LIEBERMAN: Yeah, I agree with Mike. We have definitely weakened Al Qaida. They have not achieved any of their major goals. Bin Laden has been killed.

But I think it's very important for us to understand that the enemy that we face in this war on terrorism is not a particular group, Al Qaida. It is an ideology, a violent ideology of what I call Islamist extremism. It's not Islam; it's a small group who have perverted a religion.

And it appears in a lot of different names, in a lot of different places, and sometimes through lone wolves here in the United States. And that's why, unfortunately, this particular unconventional war is going to go on for a while.

CROWLEY: Let me ask you -- turn to Libya, here, where there's been -- we still haven't -- Gadhafi is gone but still there. He's not in power but he's some place in Libya, everyone believes.

Let me ask you, what is best for the future of the Libyan people, as honestly as you can answer this? Would it be better if he was captured and tried or better if he just ran into some people who killed him?

(LAUGHTER)

ROGERS: Well, I think that's clearly up to the Libyan people. The most important phase of this, I believe, is now it's the "Where's Waldo" event of trying to find Moammar Gadhafi. They will succeed in that eventually.

But the next several weeks, two, three, four weeks is important for their establishment of governance and trying to avoid an insurgency. And it has a lot of components to it, the weapons systems, the weapons cache, their ability to get resources in the short term, their own resources, engaged in government development so they can take control and show the Libyan people that the rebels can govern.

All of that is important, and their work not to make the same kind of mistakes that were made in Iraq about dismissing all of their military and their intelligence apparatus. They need to co-opt some of that in the next few weeks. If a combination of all of those things happened, then it's probably of little consequence which route -- which thing happens to Moammar Gadhafi.

CROWLEY: Let me ask you a question. I talked to a former top official in the intelligence community who said, "I'm not that worried about the mustard gas because there is not any sign at all that he could deliver anything with mustard gas."

What worried this official were those shoulder-launched...

(CROSSTALK)

CROWLEY: ... missiles. And he said, one terrorists gets one of those and he can bring down a plane, period, end of story. And there are hundreds of them. What do you know about the whereabouts -- are we trying to track that in any way?

LIEBERMAN: Well, we're -- we're tracking that very carefully. And we're working with the new government of Libya, which is, I would say, Western-oriented. They're nationalistic, but they're of course grateful to NATO, because they know, without NATO, including the U.S., they would not have overthrown Gadhafi. They were the boots on the ground, but we were their allies and supporters.

And we're working with them to try to secure both the mustard gas and the munitions that I worry would fall otherwise in the hand of enemies of the U.S., including terrorists.

But it's very important to say here that one of the bonuses, believe it or not, of the Iraq war, was that Gadhafi got scared he would be next, and he came in from the cold, as it were, and agreed to get rid of a lot of highly enriched uranium and other weapons of mass destruction that he had, so there's fortunately less for us to protect now than there would have been. ROGERS: And, again, my concern has been, again, that's what the next few weeks is important, what are we doing to secure those weapons systems?

CROWLEY: What are we doing?

ROGERS: Well, we have a very unique capability in the United States. And we've got to shake ourselves out of this notion that NATO is going to do it all or the TNC is going to do it all.

CROWLEY: We're not as involved as you'd like us to be?

ROGERS: I would like us to be more involved.

And I'm not talking about boots on the ground or big military. We need to use our special capabilities that really only the United States has to secure, account for those weapons and render them safe. And we need to do it now.

I will tell you Al Qaida and other terrorist organizations identified by the State are very interested in getting their hands on those missile systems, other weapons, even the chemical stockpile precursors. All of that we know is happening. The race is on. This is a race we should win. We shouldn't debate if we need to have special capabilities on the ground there to take care of that particular problem.

CROWLEY: And -- and the fact is, it's, sort of, chaotic there, and inside chaos, you can grab a lot.

I have to end it...

ROGERS: In the black market. I do worry about that stuff getting legs and walking...

LIEBERMAN: No, that's always the danger. Again, I'd say that the new Libyan government is moving to create stability -- very important for us to help them get Gadhafi, and then to encourage them to create a government that doesn't punish everybody who was on the other side, but creates unity.

There are tough days ahead. But what they have done is a tremendous victory in getting rid of Gadhafi. And it's very important throughout the Arab world.

CROWLEY: Next up, Sarah Palin sure sounded like a candidate in Iowa yesterday, so is she in or is she out? We ask two veteran political reporters next.

(COMMERCIAL BREAK)

CROWLEY: We are joined now by Peter Baker, White House correspondent for The New York Times, and Mike Duffy, Washington bureau chief for TIME.

Thank you both.

I want to talk first about the president's unveil on Thursday, the jobs program. And I want to ask you, is this going to be politics or bipartisanship?

PETER BAKER, WHITE HOUSE CORRESPONDENT, THE NEW YORK TIMES: Is there a difference? I mean, I think the idea is to look bipartisan while playing politics, of course. And this is not the first time we have had a big job reboot by this president. He is going to have to make it sell a little better this time than he has in the past.

CROWLEY: That's a big old forum to go up and not say much.

BAKER: Picking out a big hammer in the presidential arsenal.

MIKE DUFFY, TIME MAGAZINE: I think we are also going to see two pieces. I think there's a short-term speech that he is going to give this week where he talks about new tax -- you know, extending tax cuts, other ways to get people to hire, unemployment insurance, maybe some infrastructure stuff.

And I think they are going to come back in a week or so and do that long-term deficit reduction proposal, which, of course, they were working on all last summer, and the president is quite, you know, devoted to.

I think they want this to be seen on Thursday as the first of two kicks at the can, both long and short.

CROWLEY: So he wants to get out ahead of the so-called "super committee" and say, here, super committee, here is how I would like -- the people that have to come up with the deficit reduction by the end of the year, the 12 senators in Congress, right?

DUFFY: They are going to put this in a -- they are going to put the proposals on Thursday into a bill and actually send the bill to Congress, which I think DeMint earlier on the show said they are never going to do, but they actually are going to do.

They say it's going to be paid for, and then I think a week later they are going to give the super committee a similar kind of set of specific proposals. So they're trying to look serious.

CROWLEY: I want -- something that Dan Pfeiffer, White House communications director, said actually, was a quote in The New York Times, where he said: "The president wants to work with Republicans and Democrats to create jobs and grow the economy, if nothing happens it will be because Republicans in Congress made a conscious decision to do nothing."

That just sort of struck me as setting the political plate here.

BAKER: Right. Actually, look, there is in fact a desire here not just to put forward a substantive proposal, which he will, and along the lines that Mike said, a lot of the things we've heard from him before in terms of the payroll tax credit and the infrastructure bank, but also to frame the debate.

Because in fact it's the only way that he can explain to the public going into next year that unemployment is still at 9 percent, and that's what his mid-session review just predicted the other, is to say it's because the other side won't do something about it, the other side is what is responsible for hamstringing our ability to get us out of this economic doldrums.

CROWLEY: And it strikes me also that this idea that it's going to be paid for. Yes, we're going to do a new stimulus plan, but they won't call it a stimulus plan, but we are going to spend money to immediately prime the pump and try to get some jobs out there, but we are going to pay for it with the following cuts.

It seems to me that the Republicans then come back and say, yes, but we can do those cuts and not do that spending.

DUFFY: Right. And that sort of is the question of September. You know, the Republicans have their own jobs plan that they would like to put forward. The president is going to be clear, be very specific in his. And both sides are trying to get past this public frustration, this perception that Washington is really, really good at bickering and fighting about silly stuff, and not actually very good at getting anything done.

And so I think we're going to find out whether September is where both parties turn the corner on this public frustration or just keep doing what they have spent the summer doing.

CROWLEY: I want to turn to the campaign trail here for a second. Sarah Palin was in Iowa yesterday, imagine that. Just a little "co- in-ki-dink." (CROSSTALK)

CROWLEY: Right, right.

And she, you know, didn't say anything about whether she was or wasn't going to run. Here is a quick idea of sort of the gist of what she was talking about.

(BEGIN VIDEO CLIP)

SARAH PALIN (R), FORMER GOVERNOR OF ALASKA: The challenge is not simply to replace Obama in 2012 but the real challenge is who and what we will replace him with, because it's not enough.

(END VIDEO CLIP)

CROWLEY: It was "run, Sarah, run," for those that -- we don't have lips to read. But that's what that was about. But you know, I look at the polling and I don't see, first of all, turf for her that is not already occupied, and second of all, some big groundswell of come on in, Sarah. What is she going to do?

BAKER: She said on Friday night there's still room. There's still room in the spectrum for her to get in, she thinks. She is teasing it out until the end of September. You know, is she actually going to run or this is just a way of continuing to have some sort of influence, some sort of attention, some sort of role in this, it's hard to say.

I think you are right that her moment, her novelty seems to have worn off. So if she is going to run, she is going to have to be a serious candidate. And she is laying out a serious message here, a very populist message against the sort of, as she puts it, corporate crony capitalism.

CROWLEY: It wasn't just Democrats, it was...

BAKER: That's right. That's something that actually goes against the Mitt Romney side of the Republican house. And so she is making a case if she runs, you can you see her sort of adopting her old Alaska anti-establishment kind of demeanor, her persona.

DUFFY: I thought it was a really interesting speech. It was longer and much -- very carefully structured. It was a presidential kind of speech. So she -- if this dance of the veils leads her not to run, it will be interesting -- particularly interesting if she took this last fan dance.

She also said that, you know, the polls, which you mentioned, don't encourage her to run, are for -- just my notes, "strippers and cross-country skiers," that was also in the speech. So if she doesn't run, we are going to miss that kind of color.

CROWLEY: We are. But we do have Rick Perry, who does -- you know, is no slouch in the color department. I want to just put up our latest CNN/ORC poll on Republicans' choices. This is of Republicans: Rick Perry, 32 percent. Mitt Romney, 18 percent. Michele Bachmann, yesterday's news, apparently, at 12 percent.

And I want to, at the same time -- and then on down the line, everybody gets into single digits after that.

There was an ad put out by a group that is supporting Michele Bachmann, but that is not affiliated with her campaign. So she was not behind this ad. But I want to play just a little bit of the ad.

(BEGIN VIDEO CLIP)

ANNOUNCER: Rick Perry is spending more money than the state takes in, covering his deficits with record borrowing, and he's supposed to be the Tea Party guy? There is an honest conservative, and she's not Rick Perry.

(END VIDEO CLIP) CROWLEY: Which is not a bad ad.

DUFFY: There's always a bigger fish. You know, Bachmann knocks out Tim Pawlenty and now Rick Perry comes along and is pushing Michele Bachmann to the sides and of course forcing Romney to -- he's sort of smoking out Romney as well.

So already this race is still three or four months before it really gets going is already having a huge effect on the field. And Perry, in particularly, really overhauled the thing in a month.

BAKER: It's going to be interesting in September. Three debates coming up starting this week on Wednesday. And for the first time Romney is going to be challenged in a more demonstrative way. He's been able to sit back and let everyone else kind of squabble while he sat on the top of the field with the money and endorsements and the infrastructure. Now he's suddenly no longer the front-runner. He has to go out there, make his case.

And Perry, being the unknown figure, except to excite conservatives, will have to defend his record. And he said this week I can take a punch as well as deliver one. This is going to be his first test.

CROWLEY: He'll probably take quite a few punches since he's already -- there was zippo honeymoon there from his fellow Republicans.

What I wonder is does Rick Perry necessarily just push Michele Bachmann to the sidelines? Or is there a route back for her?

DUFFY: If she keeps making ads like this, she may make a dent in his progress. But at the moment she has certainly be sidelined by him. He has a lot of money. He has a staff that clearly executes well. Peter is right, he turns out to be a pretty ferocious campaigner. He's clearly not afraid of saying things that are designed to delight the base. And it's interesting that a group of old line evangelical leaders met with him last weekend in Texas under a tent in the hill country. And they have thrown a lot of their weight behind him I think in part because they are quite ready to endorse a woman as a president.

So I think there's a lot of forces gathering for Perry. We'll see in these debates whether he can, you know, sort of take the heat.

CROWLEY: I mean, he's a good campaigner. There was all this talk about is he going to be Fred Thompson. But the fact is he's a far better campaigner than Fred Thompson ever was.

But do you -- you look at the polls -- the polling here, which shows him quite -- everybody really quite competitive for the president at this point. What -- how does the White House react to all this? Are they just quite happy to let this go on and he gives big speeches to the joint session of Congress.

BAKER: It's a moment of real peril for the White House. I think that they have to be feeling quite nervous about where they're at. Put aside for second who is going to win the Republican nomination, you have got an incumbent going into an election year with, again, 9 percent unemployment. Their own report says it's not going to be any better next year absent some great movement on the part of Washington or something we don't expect.

And, you know, that's just a debilitating position for a president to be in on on of of the questions about leadership. How quickly this changes, though, four months ago we were talking about bin Laden being killed and we all talked for a few days was he just secured his re-election. That lasted for, what, two news cycles.

It's a long time between now and then. The best thing for President Obama to hope for is Republicans do nominate somebody that he can present as being out of the mainstream, being too radical, too much for a lot of independent voters to stomach.

CROWLEY: And my guess is even if they aren't, he will present them as that.

DUFFY: Exactly. If the economy doesn't come back, then the Republicans will be the target in the race for the president.

CROWLEY: To be continued. Thank you both so much.

Up next, a check of the top stories, and then on Fareed Zakaria GPS a look at what women in the developing world need most. That's at the top of the hour.

(COMMERCIAL BREAK)

CROWLEY: Time for a check of today's top stories.

Tropical Storm Lee has triggered tornado warnings along the Gulf Coast and is pounding southern Louisiana with heavy rains and high winds. It's a slow-moving storm expected to drop as much as 20 inches of rain by tomorrow night.

As officials keep an eye on Tropical Storm Lee, President Obama travels to Patterson, New Jersey today to survey the damage from Hurricane Irene. The state's governor, Chris Christie, will join the president on a tour of Patterson's flooded areas.

A typhoon in western Japan has left at least 18 people dead and dozens more injured according to Japanese news sources. The storm which struck yesterday also caused massive mudslides. At least 50 people are missing.

Dominique Strauss-Kahn is back in France. The former International Monetary Fund chief had been under house arrest in New York after being accused of sexually assaulting a hotel maid, but prosecutors dropped those charges because of questions about his accuser's credibility. Strauss-Kahn was widely expected to challenge French president Nicolas Sarkozy in the country's presidential elections next year, but polls show most French voters don't want him to run. What may be the largest protest in Israel's history took place in Tel Aviv and other cities last night. The demonstrations were over the high cost of living. The protests have been going on for the past six weeks.

And those are today's top stories. Thank you so much for watching state of the union, I'm Candy Crowley in Washington. Next week, I'll be at Ground Zero with Anderson Cooper to bring you live coverage of the tenth anniversary of 9/11. That is next Sunday 9:00 a.m. to 1:00 p.m. Eastern.